G20 Dinner reinforces Syria standoff

It appears the G20 dinner did not achieve any progress in bringing the major countries closer together on Syria. Russia, China, and a number of others want stronger evidence that chemical weapons have been used, and importantly, proof of who used them. Putin believes the rebel forces are the culprits whereas Obama appears convinced that Assad is responsible.

This stand off is seemingly beyond resolution and the US are poised to sidestep the UN Security Council where they feel action will be blocked. Only the US congress vote stands in the way of military intervention.

This is a hugely important issue for the world, primarily from a humanitarian perspective, but also economically. An attack will hit world stock markets and oil prices, threating the nascent economic recovery.

Inevitably the summit has been dominated by this issue and little coverage has been generated by the main programme of creating the conditions for growth and jobs.

An important agenda item worthy of attention is the G20 Leader’s Report given by OECD Secretary General Gurria. The report updates on the OECD work agreed at Los Cabos and builds on the July 2013 G20 Finance Ministers agreement and action plan.

The report covers three key aspects.

Firstly progress by the 112 countries forming the OECD Global Forum on tax transparency. This covers the adoption and application of information exchange on request, and gives details on the performance of individual countries in following through on these obligations and agreements. The report highlights the improvements countries are making to their legal practices and information exchange processes.

 Secondly a report is provided on measures to combat base erosion and profit shifting with an affirmation of the 15 point action plan.

Thirdly more concrete proposals for the development of a global standard on automatic exchange of information (AEOI) are included building on the US FATCA and G5 multilateral pilot IGA models.

The AEOI programme will be challenging for countries with banking secrecy models and or insufficient net resources to implement large scale and sophisticated bulk information gathering and transmission mechanisms.

As far as Jersey is concerned we are performing well on the Global Forum agenda and have been described as cooperative and responsive in our first peer review.

With respect to base erosion and profit shifting we are not really involved as we are not a treaty jurisdiction such as Dublin, Luxembourg or the Netherlands which this week announced its intention to review its treaty base with African countries.

Jersey has agreed automatic information exchange with the US, UK and also with the G5, which also includes France, Germany, and Japan.  We have signed the OECD Multilateral Convention on tax referred to frequently in the G20 Leaders’ report.

Jersey has also submitted a G20 Action plan to the UK as part of the Lough Erne G8 agreement covering enhanced data capture and information exchange mechanisms, building on our strong position on beneficial ownership records.

We are up with the programme and far ahead of most in terms of alignment with the G20 aims, our one residual concern is that these measures are universally adopted as they will be expensive and resource hungry. It is important that all nations share that burden with equal commitment and reciprocity in the effort to tackle tax evasion.

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